Market Talk – October 5, 2020

ASIA:

The Indian government has told the Supreme Court it will waive certain interest levies on loans up to 20 million rupees ($272,888) under a COVID-19 support plan, a legal filing showed, in a move that will bring relief to millions of borrowers. In a filing on Oct. 2 with the Supreme Court, seen by Reuters, the government said it had decided to waive the compounding interest component on small business and some other loans related to education and housing, and credit card dues.

Tesla Inc chief executive Elon Musk indicated on Friday that the U.S. electric carmaker will make a foray into India in 2021. Tesla’s entry could come at a time when Prime Minister Narendra Modi is increasingly becoming focused on promoting the use and manufacture of electric vehicles.

Activity in Japan’s services sector contracted for the eighth straight month in September but at the slowest pace since the coronavirus pandemic started wreaking havoc on the economy, a private business survey showed on Monday, in a sign that demand is starting to steady. The final Jibun Bank Japan Services Purchasing Managers’ Index (PMI) rose to its highest in eight months, coming in at a seasonally adjusted 46.9 from 45.0 in the previous month.

The major Asian stock markets had a green day today:

  • NIKKEI 225 increased 282.24 points or 1.23% to 23,312.14
  • Shanghai closed
  • Hang Seng increased 308.73 points or 1.32% to 23,767.78
  • ASX 200 increased 150.10 points or 2.59% to 5,941.60
  • Kospi increased 30.11 points or 1.29% to 2,358.00
  • SENSEX increased 276.65 points or 0.71% to 38,973.70
  • Nifty50 increased 86.40 points or 0.76% to 11,503.35

The major Asian currency markets had a mixed day today:

  • AUDUSD increased 0.00204 or 0.28% to 0.71817
  • NZDUSD increased 0.00071 or 0.11% to 0.66380
  • USDJPY increased 0.32 or 0.31% to 105.66
  • USDCNY decreased 0.02501 or -0.37% to 6.72025

Precious Metals:

  • Gold increased 16.99 USD/t oz. or 0.89% to 1,915.69
  • Silver increased 0.67 USD/t. oz or 2.83% to 24.370

Some economic news from last night:

Japan:

Services PMI (Sep) increased from 45.0 to 46.9

South Korea:

Nikkei Manufacturing PMI (Sep) increased from 48.5 to 49.8

Australia:

NAB Business Confidence (Sep) increased from -8 to -4

AIG Construction Index (Aug) increased from 42.7 to 45.2

Services PMI increased from 49.0 to 50.8

MI Inflation Gauge (MoM) remain the same at 0.1%

New Zealand:

ANZ Commodity Price Index (MoM) increased from -1.0% to -0.2%

Some economic news from today:

Singapore:

Retail Sales (YoY) increased from -8.5% to -5.7%

Retail Sales (MoM) decreased from 27.2% to 1.4%

EUROPE/EMEA:

The UK failed to add nearly 16,000 confirmed cases of coronavirus to its national track and trace system due to an Excel error. A number of reports, including from The Guardian, Sky News, and The Daily Mail, say the mistake was caused when an Excel spreadsheet used to track confirmed cases of the virus reached its maximum file size and failed to update. The government agency that helps oversee the UK’s pandemic response, Public Health England (PHE), said some 15,841 cases had been left out of national totals because of the error but did not specify what caused the so-called glitch.

British finance minister Rishi Sunak warned that a further lockdown would cripple both the economy and society, in an interview with The Sun newspaper, stating that lockdowns have a very strong economic and social impact. Sunak spoke about his dissatisfaction with the 10 pm curfew on pubs and restaurants saying that, “Of course it’s frustrating. I know it’s difficult and wish we didn’t have to do these things.” He added that ministers were divided on the issue but encouraged Brits to abide by the rules

Germany’s service sector barely grew in September, but strong manufacturing helped the private sector in Europe’s largest economy to remain on track for a solid recovery in the third quarter, a survey showed on Monday. IHS Markit’s final services Purchasing Managers’ Index (PMI) fell to 50.6 from 52.5 in the previous month. The final composite PMI covering both the services and manufacturing sectors rose to 54.7 from 54.4 the previous month. That was higher than the flash figure of 53.7.

The major Europe stock markets had a green day:

  • CAC 40 increased 46.99 points or 0.97% to 4,871.87
  • FTSE 100 increased 40.82 points or 0.69% to 5,942.94
  • DAX 30 increased 139.27 points or 1.10% to 12,828.31

The major Europe currency markets had a mixed day today:

  • EURUSD increased 0.00673 or 0.57% to 1.17840
  • GBPUSD increased 0.00386 or 0.30% to 1.29722
  • USDCHF decreased 0.00464 or -0.50% to 0.91560

Some economic news from Europe today:

France:

French Markit Composite PMI (Sep) decreased from 51.6 to 48.5

French Services PMI (Sep) decreased from 51.5 to 47.5

Spain:

Spanish Services PMI (Sep) decreased from 47.7 to 42.4

Spanish Consumer Confidence decreased from 49.9 to 49.5

Italy:

Italian Composite PMI (Sep) increased from 49.5 to 50.4

Italian Services PMI (Sep) increased from 47.1 to 48.8

Germany:

German Composite PMI (Sep) increased from 54.4 to 54.7

German Services PMI (Sep) decreased from 52.5 to 50.6

UK:

Car Registration (YoY) increased from -5.8% to -4.4%

Car Registration (MoM) increased from -50.1% to 276.1%

Composite PMI (Sep) decreased from 59.1 to 56.5

Services PMI (Sep) decreased from 58.8 to 56.1

Norway:

House Price Index (YoY) (Sep) increased from 4.30% to 5.80%

Euro Zone:

Markit Composite PMI (Sep) decreased from 51.9 to 50.4

Services PMI (Sep) decreased from 50.5 to 48.0

Sentix Investor Confidence (Oct) decreased from -8.0 to -8.3

Retail Sales (MoM) (Aug) increased from -1.8% to 4.4%

Retail Sales (YoY) (Aug) increased from -0.1% to 3.7%

US/AMERICAS:

President Donald Trump will be discharged from Walter Reed National Military Hospital after contracting COVID-19. “Feeling really good! Don’t be afraid of Covid. Don’t let it dominate your life. We have developed, under the Trump Administration, some really great drugs & knowledge. I feel better than I did 20 years ago!” the president of the United States announced on social media this Monday.

Charles Evans, president of the Chicago Federal Reserve, stated this Monday that it will take years for inflation to rise above the 2% target. He said he would encourage the Federal Reserve to “overshoot for inflation” and feels comfortable with inflation rising to 2.5%. However, Evans does not foresee inflation meeting the 2% target until 2023, a year in which he anticipates unemployment dropping to 4%. “The Fed “needs to have an ‘in it to win it’ attitude toward our inflation objective,” Evans said.

Yet again, the Centers for Disease Control and Prevention (CDC) changed their coronavirus prevention recommendations. The CDC now claims that the virus can linger in the air for hours, mooting the six-foot distance guideline. “These transmissions occurred within enclosed spaces that had inadequate ventilation,” the agency announced.

After criticizing Brazil’s response to the Amazon wildfire outbreak, Democratic presidential runner Joe Biden offered Brazilian President Bolsonaro $20 million to handle the outbreak, which he declined. Bolsonaro remarked on Twitter that Biden warned that his administration (if elected) would impose strict tariffs on Brazil if they failed to accept the offer. “Unlike the left-wing presidents of the past, does not accept bribes, criminal land demarcations or coward threats toward our territorial and economic integrity,” Bolsonaro stated.

US Market Closings:

  • Dow advanced 465.83 points or 1.68% to 28,148.64
  • S&P 500 advanced 60.16 points or 1.8% to 3,408.6
  • Nasdaq advanced 257.47 points or 2.32% to 11,332.49
  • Russell 2000 advanced 42.67 points or 2.77% to 1,581.96

Canada Market Closings:

  • TSX Composite advanced 210.94 points or 1.3% to 16,410.19
  • TSX 60 advanced 12.08 points or 1.24% to 983.4

Brazil Market Closing:

  • Bovespa advanced 2,073.51 points or 2.21% to 96,089.19

ENERGY:

The oil markets had a green day today:

  • Crude Oil increased 2.37 USD/BBL or 6.40% to 39.4200
  • Brent increased 2.21 USD/BBL or 5.63% to 41.4800
  • Natural gas increased 0.239 USD/MMBtu or 9.80% to 2.6780
  • Gasoline increased 0.0793 USD/GAL or 7.07% to 1.2004
  • Heating oil increased 0.0532 USD/GAL or 4.91% to 1.1365

The above data was collected around 12:03 EST on Monday

  • Top commodity gainers: Natural Gas (9.80%), Gasoline (7.07%), Crude Oil (6.40%), and Brent (5.63%)
  • Top commodity losers: Rubber (-1.51%), Coffee (-1.24%), Copper (-0.72%), and Cocoa (-0.89%)

The above data was collected around 12:19 EST on Monday.

BONDS:

Japan 0.03%(+1bp), US 2’s 0.14% (+1bps), US 10’s 0.76%(+6bps); US 30’s 1.56%(+8bps), Bunds -0.54% (+0bp), France -0.25% (+1bp), Italy 0.82% (+3bp), Turkey 12.71% (-6bp), Greece 1.00% (+1bp), Portugal 0.27% (+4bp); Spain 0.27% (+11bp) and UK Gilts 0.29% (+4bp).

 

  • French 3-Month BTF Auction increased from -0.648% to -0.636%
  • French 6-Month BTF Auction decreased from -0.603% to -0.609%
  • French 12-Minth BTF Auction decreased from -0.601% to -0.611%
  • US 3-Month Bill Auction decreased from 0.100% to 0.095%
  • US 6-Month Bill Auction increased from 0.105% to 0.110%